The pre-salt reserves, no miracles.
One of Petrobras' major challenges is ensuring the expansion of its refining capacity. Replacing imports of refined products will only be possible with the construction of new refineries.
In an article published in Folha on the 18th, Professor Rogério Cezar de Cerqueira Leite made mistakes regarding Brazil's pre-salt reserves, commenting, sometimes in a jocular tone, on the relationship between this wealth of hydrocarbons and the prospects for ethanol.
The first misconception concerns the authorship of the announcement of Petrobras' excellent results. The record of 300 barrels per day from the pre-salt layer was announced by Petrobras' official channels, not by me.
The second misconception relates to his astonishment at the need to form research networks. Unlike other industrial operations, oil production faces constant technological challenges, whether of natural or operational origin.
These demands mean that, even with mastered technologies, a knowledge network is necessary to provide quick answers to challenges.
This is the purpose of the thematic networks established in Brazil under the direction of Petrobras, organizing thousands of researchers and expanding the capacity for empirical investigations in Brazilian academia. I don't understand the "wow" from the professor at the prestigious State University of Campinas.
He also demonstrates his lack of knowledge about the industry by downplaying the significance of the natural decline in production. He should know that, on average, oil production declines by 7% to 10% per year, a drop related to expected losses from producing reservoirs.
Maintenance shutdowns and an increased rate of decline in the Campos Basin explain why, despite additional pre-salt production, Brazilian production has not grown.
The professor asks a completely nonsensical question regarding OGX. Perhaps only the obliteration of reason for ideological reasons led the professor to such elementary errors regarding the company of the so-called "admittedly expert businessman Eike Batista".
He demonstrates a lack of information when he says that OGX was created to explore the pre-salt layer -- when it was created, it wasn't even authorized to operate in deep waters.
Regarding the differences in productivity between neighboring areas, the professor should know that geology teaches us that adjacent areas do not necessarily have the same properties.
Finally, the professor, who for professional reasons should be informed, seems unaware that, of Petrobras's $237 billion investment, less than half is destined for the pre-salt layer.
One of Petrobras' major challenges is ensuring the expansion of its refining capacity. The Brazilian fossil fuel market has been growing at extraordinarily high rates in recent years, practically exhausting existing refinery capacity. Replacing imports of refined products will only be possible with the construction of new refineries.
The comparison made by the professor between fossil fuel production and ethanol production makes no economic sense. While the investments planned for ethanol are decentralized among numerous agents, the pre-salt investment is concentrated in a single company.
The financing mechanisms of a system depend heavily on current production; however, the major limiting factor for ethanol is related to the planting and harvesting of sugarcane, which presupposes unstructured financing mechanisms. These latter errors are even forgiven to the emeritus professor of physics at Unicamp. After all, economics is not his specialty.